Citizens Benefit from Lower Flood Insurance Premiums – City of Houston Earns Class 6 Rating

• Flood insurance policyholders of Houston will see reductions in premiums effective October 1, 2007 because the City of Houston has earned an improved class rating from the National Flood Insurance Program (NFIP) Community Rating System (CRS). The CRS Program was created to recognize communities where floodplain management standards exceed the minimum federal standards and, in exchange, policyholders receive discounts on their flood insurance premiums.
• Communities must actively apply for a rating and are awarded a class rating from 10 to 1, with 1 being the highest achievable rating. Flood insurance policyholders located in the special flood hazard area (SFHA), or 100-year floodplain, receive discounts on their premiums based on the class rating. Policyholders located outside of the SFHA may also be eligible for discounts if they are not already paying at the preferred rate, which is the lowest possible rate offered under the NFIP.
• Houston entered the CRS in 2001 and was awarded a Class 8 rating effective May, 2002. At that time, Houston was the largest city in the nation to be awarded a Class 8. A modification to a Class 7 became effective May 1, 2006, and a five-year reverification visit in 2006 resulted in Houston moving to a Class 6 rating, effective October 1, 2007.
• The class rating improvement gives residents an additional 5% savings on their flood insurance premiums – 20% if located in the SFHA, up to 10% if located outside the SFHA.
• While there are approximately 20,000 communities nationwide participating in NFIP, only 1,199 communities in the nation are participating in the CRS. Houston has a better rating than 90% of the 1,199 participating CRS communities in the country. Only 7% of the CRS communities have been awarded a Class 6, and 3% have a Class 5 rating or better. In Texas, there are 45 participating communities in the CRS. The majority (64%) of the communities have a Class 8, 9, or 10. Twenty percent fall under a Class 7. Houston is among the 11% with a Class 6 rating. Five percent have a rating of five or better.
• When Houston was a Class 7 community, flood insurance policyholders located in the SFHA were saving over $3.8 million annually. Effective October 1, 2007, that savings has increased to over $5.1 million annually.
• Flooding can happen anywhere in Houston, and everyone lives in a possible flood zone even if they do not live in a floodplain. Approximately two-thirds of all flood losses from Tropical Storm Allison occurred outside the mapped 100-year floodplain, and nationally, approximately one-third of all flood losses occur outside the mapped floodplain. [Source: Harris County Flood Control District]
• Your property is still at risk if it is not located in the floodplain; so all property owners should obtain flood insurance. Flood coverage is not included in the standard homeowner’s policy. It is sold through private insurance companies and backed by the federal government. Contact your insurance agent to purchase flood insurance and to receive information about how the new City of Houston CRS rating affects your premium for existing coverage. When you purchase flood insurance there is a 30-day waiting period before it becomes effective. Do not wait to purchase insurance until there is a storm in the Gulf, because you may be too late to obtain coverage.

Visit www.floodsmart.gov for more information on flood insurance and flood zones.